The volume was higher than the 774.7 billion yuan recorded in April and up 201.4 billion yuan on a year-on-year basis, said the People's Bank of China in an online statement on Thursday.

M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 13.4 percent year on year to 118.23 trillion yuan at the end of May.

The growth pace was 0.2 percentage points higher than the previous month but 2.4 percentage points down from a year ago.

The narrow measure of money supply (M1), which covers cash in circulation plus demand deposits, expanded 5.7 percent to 32.78 trillion yuan as of the end of last month.

Meanwhile, China's total social financing aggregate, a broad measure of liquidity in the economy, came in at 1.4 trillion yuan in May, up 217.4 billion yuan year on year but 145.4 billion yuan less than the previous month.

Last month's increase in new yuan loans reversed the decline in April and gave encouraging signs of national economic growth, as the central bank implemented targeted easing measures to support the real economy.

The country's economy grew by 7.4 percent in the first quarter this year, down from 7.7 percent in the fourth quarter of 2013 and marking the lowest quarterly growth since the third quarter of 2012.